New Zealand's economy last year grew at its fastest pace since the global recession began.

Figures released Thursday by Statistics New Zealand indicate the economy grew by 2.5 percent in the year ending December, the highest annual GDP growth since March 2008.

Farmers and economists, however, are predicting a drought this year in the country's North Island could reduce economic growth by about 1 percent due to decreased output from dairy, beef and sheep farms.

Statistics New Zealand estimated the economy grew 1.5 percent in the final quarter of 2012 thanks to increased household spending and increased investment in farm and business equipment. Figures showed there were big gains in agriculture, forestry and fishing, as well as retail trade and accommodation.